Student housing sector buoyant but undersupply remains

Transactions in the European student accommodation sector reached almost €10 billion in 2018, but undersupply remains in a number of key destination cities, according to a new report.

In the 2018 Student Housing Report & Outlook analysis, StudentMarketing (now Bonard – see below), said there were more than 140 student residence transactions record at a total of €9.95 billion last year, with around 77,000 beds traded.

The supply of private-sector purpose-built student accommodation (PBSA) as a proportion of international university students in the city is highest in Amsterdam (55 per cent), followed by Lodz (45) and Dublin (30).

Analysing amenity provision at PBSA in 17 student cities across Europe, the authors said that 83 per cent supply utilities within the basic product price, 67 per cent offer laundry facilities, 39 per cent have a study room and just over a quarter boast a gym.

“This underscores the potential of the mainland European market. New providers and international players are bringing superior product, international expertise and operator economies of scale to these markets,” the authors said.

Meal provision is most common at student residences in Spain, Savills said, with 77 per cent of those in Seville and 53 per cent in Madrid offering inclusive meals in some form. In most other cities, meal provision was below 20 per cent, and was not offered at all at PBSA in Germany, Sweden and Poland.

The UK remains by far the largest market in Europe for student accommodation, the authors said, with investment volumes in 2017 reaching €3.9 billion, almost 80 per cent of total investment in Europe.

Investment in student housing. Source – Savills.

The authors said that investment in Germany, France and the Netherlands has expanded in recent years, although investment in the latter dropped to €250 million in 2017 due to a shortage of investment product.

2017 was also a record year for investment in student accommodation in Spain, thanks to Greystar’s acquisition of the Resa portfolio of student residences and GSA’s purchase of the Nexo brand.

The US-based Greystar, which recently announced an expansion into the French student accommodation sector, was ranked at the top investor in student housing in the August 2017-August 2018 period.